Russia lied to the International Monetary Fund. The country overestimated its currency reserves by $1 billion in 1996 while applying for support, and IMF money may have been used for profiteering. The IMF is considering lending Russia $4.5 billion more. The Washington Post suggested that the IMF won't give up on Russia but that Congress may give up on the IMF.

The United States intercepted two Russian bombers over Iceland. Western officials were bewildered by Russia's first probe of Western air defenses since the end of the Cold War. Moscow denied that the flights were unusual.

Israeli Prime Minister Ehud Barak formed a government. He is partnering with secular, ethnic, and religious parties that support the peace process. A Los Angeles Times editorial points out that the coalition members share little else.

A cable car crash killed 20 people in the French Alps. All were working at a space observatory. Authorities were unsure of the accident's cause.

The Federal Reserve raised interest rates. The .25 percent hike is the first in two years. The ever-hawkish Fed warned of "the emergence, or the potential emergence, of inflationary forces that could undermine economic growth." Inflation doves argued that the hike will cut jobs. The Washington Post approves, but William Greider argues in the Washington Post that the Fed is needlessly punishing the masses; instead, it should discipline only banks that lend promiscuously.

Congress limited Y2K liability. Potential plaintiffs must grant businesses 90 days for repairs before suing and will be able to collect only limited punitive damages. Spins: 1) The bill will save computer companies from financial ruin. 2) The bill will expose their clients to financial ruin. 3) It's a slippery slope to leaving consumers unprotected in product liability cases.

Kurdish rebel Abdullah Ocalan was sentenced to death. A Turkish court found him guilty of treason for waging a bloody drive for Kurdish self-rule. But his execution may not win the requisite parliamentary approval, because Turkish politicians fear martyring him and sparking Kurdish unrest. (Listen to the chorus of pleas for leniency in " International Papers.")

Kosovo update: 1) Thousands of Serbs rallied for Slobodan Milosevic's resignation. More protests are scheduled in coming weeks. 2) Ethnic Albanians continued to loot and torch Serb villages. Kosovar Serbs continued to flee. 3) Evidence that directly links Milosevic to Serb atrocities was found. The British paper the Observer unearthed a trove of documents that recount how Milosevic planned to systematically eliminate Kosovar Albanians.

President Clinton proposed using federal budget surpluses to shore up Medicare and Social Security. The larger-than-anticipated surplus would be used to cover prescription drugs for Medicare recipients and to partially fill the projected gap in Social Security coverage. House Republicans countered with a tax-cut plan. The Wall Street Journal forecasts that Clinton will partially yield to Republican calls. The Washington Post entreats Clinton to stand firm, warning readers not to believe in "an accounting mirage to finance a misshapen tax cut that the country can't afford."

President Clinton presented his plan for overhauling Medicare. His proposal introduces prescription drug coverage and eliminates payment for preventive services but aims to cut costs by stoking price competition among HMOs and requiring patients to chip in for some services. The New York Times deems the plan "sensible" and "prudent," and a WashingtonPost editorial observes that Clinton deftly "changed the subject from the solvency of Medicare to its adequacy." But the New Republic laments the plan's "gross generational inequity" and instructs President Clinton to spend the money on education instead. A Post news analysis asks "whether Clinton can use his talent for political positioning to actually implement policy."